interest v. "usury"
From: Bill Ryan (william_b_ryan_at_hotmail.com)
Date: 09/05/04
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Date: 5 Sep 2004 12:36:57 -0700
In reply to Jim Blair:
Your usage makes too much sense and is too consistent
with the way words are commonly used. That will not
do for this bunch. They want two different words to
mean the same thing so that no one will know just
what they are talking about.
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[REPLY] The two words interest and profit are often
used interchangeably by economists, with one or the
other being inclusive of the other, depending on the
context. Surely you knew that. What is purpose of
this snide comment?
-
Interesting, but your distinction between
"productive" and "non-productive" loans is not used
to separate interest (OK) from usury (BAD) by anyone
that I know of.
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[REPLY] Incidentally, Belloc published the essay in
1924. It is how usury has been defined by mainstream
Christian theologians for centuries.
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In the early days of the Christian church any
interest was usury, and that is still the case in
some Muslim countries.
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[REPLY] In the early days there was no concept of
credit. The definition was refined (not changed) in
the light of modern knowledge and the development of
modern institions.
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Your [actually Belloc's] distinction would prohibit
consumer loans: for a house or TV set.
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[REPLY] It would not. The loans are productive if
they facilitate production, distribution and
consumption. The presumption* is that they will be
repaid from the future incomes of the purchasers, and
that future income (for the economy as a whole) is
proportionate to current spending. Since you can
live in a house throughout your lifetime, modern
creditary mechanisms allow you to move in and live in
it right now, paying for it not from your savings,
but from your credit, enabling you to pay for the
house you are now living in throughout your lifetime.
Otherwise, in the absence of credit, you would have
to save a lifetime, at which point you will be dead.
Which is indeed the case in societies that have not
evolved modern creditary mechanisms. There are a
variety of reasons they have not, including archaic
religious proscriptions and a general level of
ignorance.
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* The presumption does not automatically manifest,
as noted by C. H. Douglas, which he would compensate
through retail discounts and consumers' dividends,
funded directly by, for example, the central bank.
In his day the term "the central bank" was not in
common usage, or certainly it was not understood as
it is today. His term for the concept was "the
national credit account."
http://www.geocities.com/socredus/compendium
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